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Florida No. 2 in Eyes of CEOs; Business Leaders Say More Work Is Needed

In the eyes of those who run companies, Florida is now the No. 2 best state in which to do business.

For business advocates and lobbyists in the Sunshine State, moving into second place on Chief Executive magazines survey of CEOs' "Best and Worst States in which to do Business" is a compliment to the efforts of Gov. Rick Scott and state legislative leadership.

But business backers say the mission is incomplete.

State leaders, they say, still need to tackle areas such as tort and insurance reform, further reduction to the corporate income tax, unemployment, foreclosures and warding off federal efforts to undermine Floridas status as a right to work state.

Creating a competitive business climate that embraces the spirit of free enterprise is essential to helping return Florida to the No. 1 job creator in the nation, Edie Ousley, Florida Chamber of Commerce vice president of public affairs, responded in an email.

While Florida is moving in the right direction, we must reduce Floridas reputation as a haven for plaintiff trial lawyers and bad-faith insurance lawsuits that have given Florida a bad legal-climate reputation, and we must close the job-killing online sales tax loophole like Texas just did and level the playing field for Floridas bricks-and-mortar businesses.

Tom Feeney, Associated Industries of Florida president and CEO, said the state has further to go in reforming personal injury protection auto insurance, even after this years successful legislation, and that the tort system remains too attractive for trial lawyers to go after deep pockets.

The state also has to continue to block federal efforts to usurp Floridas status as a right to work state.

The Obama administration is trying to undermine the advantages of open labor practices, Feeney said. Every day the National Labor Relations Board and Obama are trying to decrease advantages to business. The consequence there is that if Obama is successful, we will not lose jobs to Georgia and Texas, but all 50 states will lose jobs to Latin America and elsewhere.

Texas retained for the eighth consecutive year its hold on the top spot among CEOs interviewed by the magazine, with former No. 2 North Carolina dropping into third, the spot held a year ago by Florida.

House Speaker-designate Will Weatherford, R-Wesley Chapel, said the states low tax burden, talented work force and beautiful weather have all factored into the ranking.

Our goal is to make Florida the No. 1 state for business and we will continue to find ways to incentivize the creation of jobs while building a robust economy."

Florida Secretary of Commerce Gray Swoope said word of the changes is getting out.

Everywhere we go people are taking notice of the work and the progress that were making on a business-climate standpoint in the state of Florida, Swoope said. It is significant, people will see that and recognize, hey something is going on and I need to be a part of that.

The magazine -- basing its findings on the perceptions of 650 CEOs regarding taxes and regulation, work force quality and living environment -- has moved Florida up eight places since 2008.

A year ago, when Florida moved from sixth place to third, Gov. Rick Scott playfully wrote Texas Gov. Rick Perry that "Florida will not settle for third place."

Since Scott took office, his administration has enacted business tax and regulatory reforms that have contributed to the creation of more than 140,000 private-sector jobs and an unemployment drop of 2.1 percentage points last year one of the biggest decreases in the nation, wrote J.P. Donlon, the author of the Chief Executive report.

It is perhaps no coincidence that Texas and Florida have the highest net migration of people to their states from 2001 to 2009. (By contrast, New York and California lost over 1.6 million and 1.5 million in net migration out of the states, respectively, over the same period.)

The magazine listed this as the positive development trend for Florida: New tax relief -- and boosterish Governor Scott -- excite owner and executive.

Quotes from unnamed CEOs were mostly positive, stressing the weather and lack of a state income tax.

The Carolinas, Florida, and Texas have become very business-friendly, with excellent work forces, high quality of life, and moderate costs of living.

Yet, not everyone was sold.

Other unattributed CEO quotes:

Florida is not that banker-friendly. The foreclosure process takes several years on average and this is holding their recovery back.

Florida has a bad business environment for insurance companies with tough regulations.

Florida is now the worst state for third-party bad faith. Trial bar is running the state. Citizens Insurance is a major problem that could bankrupt the state if a major disaster hits Florida.

A report released Tuesday from the state Office of Economic Demographic Research indicated much work is also ahead for legislators and economic development leaders.

According to the report, the state gross domestic product (GDP) ranked us 40th in the nation in real growth, with a gain of 1.4 percent.

Meanwhile, per capita personal income grew 3.5 percent in 2011 over 2010, ranking the state 45th in the country with respect to state growth. The national average was 4.3 percent.

And about half of all residential loans in Florida are for homes that are underwater.

Feeney said the CEO message to Florida is to redouble our efforts.

And that if Florida surpasses Texas, there would continue to be work to do, including raising education standards and reducing unemployment, Feeney said.

There are lots of areas for improvement. The fact that were doing better than New York or California is not sufficient. New York and California policymakers are doing everything they can to crush entrepreneurial spirit.

The bottom five in the view of the CEOs, in order from 46 to 50, are the heavily unionized states of Michigan, Massachusetts, Illinois, New York and California.

Other than Massachusetts replacing New Jersey, now No. 45, the bottom didnt change.

Californias enduring place of perpetual decline continues in this years ranking, Donlon wrote. Once the most attractive business environment, the Golden State appears to slip deeper into the ninth circle of business hell. The economy, which used to outperform the rest of the country, now substantially underperforms. And its status as the most ruinously contentious place to operate remains undisturbed in eight years.